This article explores the role and purpose of the Fair Work Agency (FWA), the UK’s new labour market enforcement body established in April 2026 under the Employment Rights Act 2025.[1] This agency brings together existing labour market functions to strengthen and protect workers’ rights, whilst tackling labour exploitation and promoting increased compliance with employment law. As the UK labour market enforcement framework evolves, employers must understand not only the powers available to the FWA, but also how those powers differ from those exercised by organisations such as trade unions and the Health and Safety Executive. This article outlines the purpose of the FWA, and the practical steps employers can take to minimise the risk of enforcement action and financial penalties. It will also consider recent cases of modern slavery offences to demonstrate the serious consequences of labour exploitation, serving as an important reminder of maintaining lawful and ethical working practices. For employers operating within construction, property services and wider trade sectors, the introduction of the FWA is particularly significant. Such industries often rely on subcontracting arrangements and temporary labour, meaning employers must be able to demonstrate clear compliance with employment law and worker protections to minimise regulatory risk.
Why was the FWA created?
The FWA was established to promote a streamlined and coordinated labour market enforcement framework in the UK. Previously, responsibility for enforcing employment rights was spread across different bodies, such as the Gangmasters and Labour Abuse Authority (GLAA) and the Employment Agency Standards Inspectorate.[2] The Government created the FWA to strengthen protections for vulnerable workers, whilst making compliance easier for employers. Its role extends beyond responding to complaints and includes intelligence gathering, investigations and identifying non-compliant employers.[3] Following the FWA’s Delivery Plan, the agency has adopted an intelligence- led approach to regulation, positioning a front-line delivery body that works closely with local authorities and other stakeholders to analyse labour risks and potential breaches of employment law.[4] This reinforces the Government’s wider ambition to shift a predominantly reactive labour market enforcement model, towards a prevention-focused one. For employers, this signals a regulatory environment where compliance failures are increasingly identified through intelligence sharing, further emphasising the importance of maintaining robust compliance systems and enhanced protections for workers. The creation of the FWA also forms part of the Government’s wider Employment Rights Act 2025 reforms, reflecting a move towards a coordinated approach to ensuring compliance.
However, one of the FWA’s most significant functions for employers is the enforcement of basic workplace rights, particularly compliance with National Minimum Wage legislation and Working Time regulations. Breaches in these areas account for a substantial proportion of labour market enforcement activity. For construction and trade employers, compliance risks can arise through unpaid travel time, unlawful deductions from wage, inaccurate holiday pay or failures to maintain working time records. Consequently, the FWA’s improved enforcement powers place greater emphasis on payroll accuracy and record keeping, to ensure proactive compliance.
Relationship between the FWA, HSE and Trade Unions
Whilst the FWA, HSE and trade unions all play important roles in protecting workers, their functions and powers are fundamentally different. As established, the FWA is a statutory enforcement body capable of regulating compliance with employment rights and labour market legislation, including National Minimum Wage compliance.[5] For construction and trade sectors, this is significant given the frequent use of subcontractors or agency workers, where failures in pay practices or record keeping can attract higher regulatory scrutiny. By contrast, the HSE is the national regulator for workplace health and safety, deriving its powers primarily from the Health and Safety at Work Act 1974.[6] Its essential function is to uphold workplace safety regulations, rather than enforcing employment rights law.
However, trade unions differ from both organisations as they are representative bodies that support workers through collective bargaining and raising workplace issues.[7] Although they advocate for workers and identify potential breaches of employment rights, they do not possess the statutory enforcement powers available to either the FWA or HSE. Despite this, all three organisations share a common objective of protecting workers and fostering fair treatment in the workplace. Practically, information provided by the trade unions or other regulatory bodies can be used to assist the FWA in identifying potential breaches of employment law and regulations.
Powers of FWA and enforcement
The FWA possesses substantial powers designed to ensure compliance with employment law and tackle worker exploitation. Its powers include conducting investigations, tackling modern slavery offences and collaborating with other enforcement agencies to disrupt labour market abuse if necessary. It also inherited functions previously exercised by other labour market bodies, including powers relating to labour market enforcement and investigating labour exploitation. [8] Collectively, these powers demonstrate the FWA’s position as a central enforcement body within the employment law framework. For employers operating in the construction and trade sectors, this is especially relevant given the widespread use of labour providers and temporary workers within workforce models. Employers should therefore ensure robust due diligence and monitoring processes are in place to comply with employment rights obligations in their labour supply chains.
Where breaches are identified, the FWA can take a range of enforcement action including issuing compliance notices requiring employers to rectify unlawful practices or imposing financial penalties, where permitted by legislation. Despite being in its first year, the FWA has already commenced enforcement activity, highlighting its willingness to use its regulatory powers in cases of non- compliance. In July 2026, Coventry Magistrates’ Court fined Peter McGuigan for operating as an unlicensed gangmaster contrary to section 12 of the Gangmasters Act 2004, after supplying 125 workers to an abattoir without the required licence.[9] The court additionally imposed a 12-month Labour Market Enforcement Order, requiring him to address his non- compliance. At the more serious end of the spectrum, James Dean Harrison was sentenced to six and a half years’ imprisonment for requiring a person to perform forced labour, having exploited a vulnerable worker for financial gain, and subjecting them to physical and verbal abuse.[10] Together, these cases demonstrate both the serious consequences of worker exploitation and the breadth of the FWA’s enforcement remit, further emphasising its role in addressing labour market non- compliance, and serving as a reminder to employers to ensure fair, lawful employment practices across the UK. Yet, many employers are more likely to encounter the FWA in relation to National Minimum Wage compliance, holiday pay entitlements and record keeping requirements than through cases involving serious labour exploitation.
Employer Compliance Checklist
Employers should take proactive steps to ensure compliance with employment law and reduce the risk of enforcement action, such as financial penalties and prosecution. Key considerations include:
- Reviewing employment contracts and policies
- Verifying National Minimum Wage, holiday pay compliance, working time records and accurate payroll
- Training managers to identify labour exploitation
- Conduct due diligence on labour suppliers/ agencies
- Maintain effective whistleblowing and reporting procedures
- Ensure workers are protected from whistleblowing detriment and can raise concerns confidentially without fear of adverse treatment
Looking ahead, the FWA expects to play an increasingly active role in labour market enforcement. Its Delivery Plan outlines a focus on intelligence- led investigations and continuous, improved employer guidance for labour market regulation. As its responsibilities expand, employers should expect greater scrutiny of workplace practices and supply chains.[11] Ultimately, the FWA represents a more visible, forward- thinking approach to employment rights enforcement. For construction and trade employers, ensuring compliance with National Minimum Wage requirements and working time obligations will be essential to minimise regulatory risk and adapt to the evolving employment law landscape.
[1] Employment Rights Act 2025
[2] Department for Business and Trade, Final Stage Impact Assessment: Establish the Fair Work Agency to bring together existing state enforcement functions (21 October 2024)
[3] Fair Work Agency, Delivery Plan for 2026 to 2027 (Department for Business and Trade, 21 August 2026)
[4] Ibid
[5] Ibid
[6] Health and Safety at Work etc. Act 1974
[7] Trade Union and Labour Relations (Consolidation) Act 1992
[8] Ibid
[9] Fair Work Agency, Man Convicted after being found operating as an unlicensed gangmaster in Warwickshire (GOV.UK, July 2026) Gangmasters (Licensing) Act 2004 s.12.
[10] Fair Work Agency, Coventry man jailed for modern slavery offences (GOV.UK, 2026); Modern Slavery Act 2015
[11] Ibid